How the major forces of Covid-19 and Brexit are forever changing the way we shop Updated / Sunday, 7 Feb 2021 07:00 The pandemic has rapidly accelerated a move towards online shopping When shoppers do venture back to city centres and shopping centres later this year, things are going to look and feel very different. The Covid-19 pandemic has rapidly accelerated a move towards online shopping and any high street brand that was already flailing will have disappeared from Irish towns and cities, bringing with them the loss of thousands of Irish jobs. Many of the absences will be British brands including the eleven Debenhams department stores on shopping streets from Dublin and Cork to Newbridge, Galway, Limerick, Tralee and Waterford. Other stores that will be gone include Topshop, Topman, Dorothy Perkins, Wallis and Miss Selfridge. Nearly all of these brands have now been gobbled up by two dominant British retail giants - ASOS and Boohoo. But with all the red tape and delays around online shopping post-Brexit, will Irish consumers follow those brands to these websites to get their fast fashion? Or could there be a shift change towards something different? "People are saying: 'Is the high street dead?’ And I don’t think it’s going to be dead, but it's going to have to go through a period of rebirth," says stylist and fashion presenter Irene O’Brien. "I think it's completely devastating that all those staff are losing their jobs in the bricks and mortar stores, and not only the people that are working in those stores, but there’s lots of jobs around those stores as well. "I couldn’t help over the last few days doing a mental walk down Grafton Street and a mental walk down Henry Street and in Cork and think of all the places that are empty and it really struck me that there’s going to be big gaping holes when things re-open." What’s the deal? ASOS and Booho Britain’s biggest online fashion retailers have had a busy start to the new year, swooping in to feast on the remnants of multiple collapsed UK high street brands. Boohoo which only started life in 2006, has acquired the grand dame of British shopping, Debenhams, for £55 million sterling. However, the deal does not include any of the chain’s 124 British stores and puts 12,000 British jobs on the line. This is on top of the 1,000 jobs already lost in Ireland when the company went into liquidation here in April of last year, leading to a protracted battle over redundancy payments to staff. Earlier this month, ASOS splashed £330m on a number of brands including Topshop, Topman, Miss Selfridge and HIIT from the Arcadia group which it said would "resonate" with its youthful customer base. However, the deal which was completed this week, does not include the 70 retail stores associated with these brands and puts another 2,500 jobs at risk in the UK and almost 500 in Ireland. Approximately 300 employees working in design, buying and retail partnerships will transfer to ASOS, but they are the only jobs to be saved. Boohoo is now eyeing up some of the other Arcadia leftovers, including Dorothy Perkins, Wallace and Burton. Both digital giants were already growing at a strong rate before the Covid-19 pandemic struck. ASOS quadrupled its profit in the 2019-2020 financial year whilst Boohoo posted a 51% jump in first half profit, despite negative publicity over its supply chain. Neither will have to carry the physical costs of the bricks and mortar stores that have been a fixture on shopping streets for decades. "They went for a song," says Gerry Light, General Secretary with the trade union Mandate. "From Arcadia and Debenhams alone, there are 1,500 good retail jobs gone in Ireland, and we’re nowhere near the end of this crisis." Accelerating a trend The Covid-19 pandemic has brought many changes, but the push towards online shopping isn’t new. "There was always going to be a move to online. It was inevitable it was going to happen, but what was expected to take five years, has really taken five or six months," says Duncan Graham, Managing Director at Retail Excellence. "When you actually look at the anniversary of this pandemic by March, many non-essential retailers will have been shut for half the year. The only option for many of them has been to develop an e-commerce site." Irene O’Brien agrees: "The pandemic didn’t cause this necessarily, it kind of accelerated what was happening. I think the offering online has been reshaping for some time and the Covid restrictions brought some people to a new way of shopping, that they probably wouldn’t have ever engaged in before. There were a lot of people who just really weren’t into online shopping, so I suppose the online world has been opened up." Stylist and fashion presenter Irene O'Brien Nevertheless, she predicts online shopping will become an increasingly competitive space, and just having a presence there now, does not mean a business will survive once things open up again. Traditionally 70% of online shopping in Ireland has been shipped in from outside of the State, particularly from the UK through sites like Amazon, but there are many signs that this is changing. In the run up to Christmas, An Post noted a large increase in parcel deliveries from Irish online retailers, whilst websites and like the online marketplace 'Shop in Ireland' allowed smaller retailers to show their wares to a wider audience. During 2020, over 300 Irish retailers received close to €10m in funding under the Online Retail Scheme run by Enterprise Ireland for the Department of Business, Enterprise and Innovation. It targets retailers who already have both a physical store and an online presence, and two further rounds of funding totalling €10m are expected to be announced in the coming months. The Brexit Factor Earlier this month, the UK’s fashion and textile industry wrote an open letter to British Prime Minister Boris Johnson warning that it was facing "decimation" over the red tape thrown up by Brexit. It remains to be seen whether Irish consumers will still be willing to do their online shopping through British based websites, if the push to buy Irish and help local businesses continues to gain traction. Since January, some consumers have already been turning to German .de or French .fr sites to ensure that they are not hit with any hidden charges, although delays can still result if goods have to travel via the UK land bridge. Web giant Amazon is also reported to be considering opening its first fulfilment centre in Ireland, which could enable faster parcel delivery and more online choice here. This month alone, the European Consumer Centre in Ireland received over 400 complaints, half of which related to UK retailers. Of those complaints, approximately 100 related to Brexit. Many consumers were surprised to be hit with taxes and charges that in some cases they were not expecting. Revenue has now warned Irish consumers that: "buying goods from the UK (excluding Northern Ireland) may have certain duties such as VAT, Customs Duty and Excise Duty." As a general rule, if the value of the goods is less than €22, a consumer will not have to pay, but anything over this amount should incur VAT at 21%. If what you are purchasing is worth more than €150, then you may be faced with further customs duties. ASOS has already got around this issue by fulfilling Irish orders from a base in the EU, whilst Boohoo says they will front the costs themselves. In cases where this does not happen though, delivery companies such as An Post or DPD may charge you before you can take receipt of your parcel. A spokeswoman for the European Consumer Centre said it is important that consumers do their own research: "As a general rule, in order to make an informed decision and minimise the risk of incurring charges in addition to the product price and standard delivery fee, we advise Irish consumers shopping on UK and any other non-EU shopping platforms and websites to thoroughly research who the seller of a particular product is and where it is shipped from." It is this kind of research that Irene O’Brien believes could make consumers think harder about where their goods are coming from and how they are supplied. "We’re going to become really aware of where something is shipping from, which means people will think more about where they’re buying from too," she says. Boohoo, for example saw its share price dive in September last year after a damning report uncovered evidence of poor working practices in the company’s supply chain. Dr Dee Duffy, Programme Chair of the Masters in Fashion Buying and Management at DIT believes people will only shop from these UK websites, if there are no Brexit delays: "The consumers of fast fashion, I don’t know if they’re emotionally invested in the brand. "I think they appreciate the channel so they might like the channel of ASOS because it's getting it fast, cheap and convenient. So, what they pick up on that channel, I don’t think they care as much versus getting it for Saturday night." An end to fast fashion? Brands like Debenhams and the Arcadia group run by the former "king of the high street" Philip Green, who was already associated with the failure of the BHS department store, had been under pressure for years, before the pandemic struck to seal their fate.